Bosch shuts down solar division; total loss amounts to €2.4 billion

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The start of 2014 will herald an end to Bosch’s activities in the solar PV industry, the company has announced.

As reported earlier today on PV-Tech, Bosch Solar Energy has tried unsuccessfully to achieve a competitive position, which it attributes to global overcapacity and unsustainable module price declines.

Stefan Hartung, chairman of Bosch Solar Energy AG supervisory board and member of the Robert Bosch GmbH management board responsible for the energy and building technology business sector, said: “Despite extensive measures to reduce manufacturing cost over the past year, we were unable to offset the drop in prices, which was as much as 40%.”

As far as possible, individual units are to be sold quickly. All development and marketing activities are likewise to be ended. However, Volkmar Denner, chairman of the board of management at Robert Bosch told its associate newspaper BoschZünderOnline: “If we don't manage to sell, we will have to stop production at the beginning of 2014.”

Early estimates indicate that Bosch’s total loss amounts to €2.4 billion (US$3.1 billion), including €1.6 billion (US$2.1 billion) in impairments. However, Denner noted that the company cannot provide a precise figure at this time.

“Over recent months, Bosch has comprehensively examined every aspect of its solar business. We have considered the latest technological advances, cost-reduction potential, and strategic alignment. And there have also been talks with potential partners,” said Denner.

“However, none of these possibilities resulted in a solution for the solar energy division that would be economically viable over the long term. We deeply regret this,” concluded Denner.

As announced in January 2013, Bosch’s solar energy division suffered a loss of approximately €1 billion (US$1.3 billion).

Proposed “idling” of France’s largest crystalline silicon module plant last year has now resulted in its sale. The facility, in Vénissieux, near Lyon, employs approximately 200 people.

Plans to construct a €520 million (US$675 million) integrated solar module manufacturing plant in Penang, Malaysia by Bosch, have also ended. Bosch's shares in this plant will be sold to PV module manufacturer aleo solar AG. Bosch currently holds a 90.7% share in aleo solar.

However, in January, aleo solar itself warned of a “substantial net loss” on preliminary full-year revenue of €279.9 million (US$363.2 million), down 39% compared with 2011. Bosch has guaranteed funding to aleo solar until March 2014.

York zu Putlitz, CEO and CFO at aleo solar said: “Irrespective of the search for a buyer, aleo solar AG has already taken action: we have closed our factory in Spain, commenced the liquidation of our joint venture in China and have disposed of our shares in Bosch CISTech.”

With regards to the Bosch Solar CISTech in Brandenburg, Germany, it will be continued, although its future is yet to be determined.

Denner said: “Our Thermotechnology and Security Systems [CISTech] divisions account for the lion's share of our energy and building technology business sector. And with Bosch currently focusing on the subject of “interconnectivity” across all business sectors, there is a lot of potential for developing cross-divisional products, even without the solar energy division. Only a handful of companies anywhere in the world have such a wealth of complementary expertise.”

Putlitz continued: “We are now examining further activities for improving our earnings. Our dealer network of 2,100 installer firms gives us good access to the market. That said, we expect another difficult year in 2013. The general political environment has deteriorated in several of our core markets and we continue to suffer from overcapacities and pricing pressure.”

Publication of the results for the 2012 financial year from aleo solar AG has been postponed until 28 March 2013.

Furthermore, effective 1 April 2013, the supervisory board of Bosch Solar Energy AG has appointed Steffen Haack as chairman of the management board, to oversee sales and technology. Haack has been the management board member responsible for sales since 1 August 2012.

In addition, Franc Gruber has been appointed as a management board member responsible for commercial affairs. Gruber has worked for Bosch in various executive commercial functions within and outside Germany since January 2000, and most recently in the corporate controlling department.

The present chairman of the board of management of Bosch Solar, Holger von Hebel, and the management board members Volker Nadenau and Jürgen Pressl will resign from the company board of management effective 31 March 2013.

The division currently employs 3,000 associates, of which roughly 850 of them are at aleo solar AG and 150 at CISTech.

Denner said, “We will not leave our associates in the solar energy division in the lurch at this difficult time, but will instead try to support them in their search for new jobs at other Bosch locations and at other companies. It is with this in mind that we're working closely with executive management and employee representatives.”

Stefan Hartung added: “We know full well that associates face a difficult time. Together with the employee representatives, we will search for solutions that are as acceptable as possible. We appreciate the hard work done by our Solar Energy associates. Over the past year, our associates have fought hard for the future of their division. For this, we owe them our thanks. Nonetheless, our joint efforts to achieve long-term economic stability failed to bear fruit.”

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